DTE Energy 1Q Net Fall 16%; Co Backs 2009 Op EPS View

JayMiller

DTE Energy Co.'s (DTE) first-quarter net income fell 16% as the company posted a double-digit decline in revenue and a less favorable impact from unusual items, but the utility backed its 2009 guidance.

Slumping sales have been hurting utility companies generally, but DTE has been doubly challenged as its home territory, Michigan, suffers from declines in the automotive and steel industries.

"DTE Energy is well positioned in these unprecedented economic times," said Chairman and Chief Executive Anthony F. Earley Jr., adding that the company believes its 2009 plan adequately addresses the financial pressures it faces.

DTE reported net income of $178 million, or $1.09 a share, compared with $212 million, or $1.29 a share, a year earlier.

Operating earnings, which exclude unusual and hedging items, rose to $1.10 from 77 cents a share.

Detroit Edison's earnings jumped to 48 cents a share from 25 cents as the company was able to charge higher rates, while the company's natural-gas utility, which consists primarily of Michigan Consolidated Gas Co., reported a rise to 37 cents from 36 cents.

The company again backed its forecast for 2009 operating earnings of $2.75 to $3.05 a share. The forecast was below Wall Street expectations when it was issued in February, reflecting continuing challenges.

"We are benefiting from our disciplined execution of continuous improvement initiatives that are reducing our costs," said Chief Financial Officer David E. Meador. "The savings realized from these efforts during the first quarter keep us on track to achieve the $100 million of cost reductions included in our 2009 guidance.

The company also said it renewed its $1 billion credit facility.

In after-hours trading, DTE shares were down 0.9% at $28.33. The shares have rebounded nearly a quarter from last month's 52-week low, but they remain down more than third from last July.

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